Employers: save premiums with fixed contracts!



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The Dutch Balanced labor Market Act (Wet arbeidsmarkt in balans, WAB) introduces a contribution differentiation for unemployment insurance ("UI"), with the format of the contract determining the unemployment insurance contribution (WW-premie). The low contribution rate is 2.94% and the high contribution rate is 7.94%. It will therefore make sense for employers to consider this when deciding on the type of employment contract to choose from 1 January 2020.
Geschreven door:

Inge Slangen

+31 (0)6 109 13 999


When to use the low UI contribution?

The employer can use the low unemployment insurance contribution:

  • in written open-ended employment contracts that specify fixed working hours;
  • for employees up to the age of 21 who work no more than 12 hours a week on average;
  • in practical training contracts with students on block or day release (beroepsbegeleidende leerweg, BBL);
  • if the employer makes a payment under employee insurance schemes as an employer’s payment or self-insured amount (WW, ZW, WIA, WAO, WAZO).

When to use the high UI contribution?

The employer has to use the high unemployment insurance contribution in relation to all flexible employment relationships. This applies to the following cases in any event:

  • where there is a fixed-term employment contract;
  • where the employer does not hold a copy of the open-ended employment contract that both parties signed;
  • where the payslip does not state whether it is an open-ended employment contract or an on-call contract, or whether this has been agreed in writing;
  • where there is a temporary employment contract;
  • where there is notional employment;
  • where there is an on-call contract.

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On-call contract?

There is an on-call contract if the amount of the work is not set out as a number of hours per unit of time of no more than one month or a maximum of one year where the salary is spread equally across the year. There is also an on-call contract if the employee is not entitled to his salary, established in terms of hours, if he has not done the agreed work.

Review of low UI contribution

The employer must review the low UI contribution in a number of cases. This means that the employer will have to pay the high UI contribution with retrospective effect. When does this happen?

  • When a written open-ended employment contract comes to an end no more than two months after it starts;
  • If the salaried hours exceed the contractual hours by more than 30% in the payroll tax form for the calendar year in question.


The following examples clarify the potential savings for the employer:

  • The employee earns EUR 2,500 gross per month, based on a written open-ended employment contract that is not an on-call contract. His employer may use the low UI contribution and pays EUR 73.50 per month instead of EUR 198.50;
  • The employee has been employed since 1 November 2019 under a written open-ended employment contract that is not an on-call contract. He earns EUR 1,850 gross per month. His employer must pay the low UI contribution of EUR 54.39 per month. The employer dismisses the employee during the probationary period on 30 November 2019. The employer must pay the high UI contribution of EUR 146.89, with retrospective effect, from 1 November 2019.
  • The employee starts work for a fixed term on 1 January 2020 and earns EUR 3,250 per month. His contract is converted to an open-ended one on 1 July 2020. The high UI contribution of EUR 258.05 applies up to 1 July 2020. After this, the low UI contribution of EUR 95.55 applies, which represents a saving for the employer of EUR 162.50 per month.

Increasing the administrative burden

It follows from all this that employers will be able to make considerable savings from 1 January 2020 by opting for an open-ended employment contract. But they will have to take some action to achieve this: not only will payslips have to adjusted but the employer will also have to hold copies of its open-ended employment contracts. If necessary, they may have to conclude new employment contracts with those of their employees who are already employed under open-ended contracts.


About the author

Inge Slangen

+31 (0)6 109 13 999


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